IBEX 35 in June 2012: Rescue and the Battle for 6,300 Points

The June 2012 IBEX: 6,300 Points as the Last Stand

The IBEX 35 began June 2012 searching for a bottom, with supports counted on one hand and bated breath. The 6,300 points became the line separating a technical rebound from another bearish leg, and an almost obsessive vigilance was mounted around this figure, session after session. No one doubted the trigger: a €100 billion rescue for Spanish banks being cooked up in Brussels, which, according to the dominant narrative, would ultimately come out of everyone's pocket. Asian markets peine in the red, and the calendar pointed to June 12th as the date many expected to see the longed-for bottom.

What Peine in June 2012 with the IBEX 35 and the Bank Rescue?

The destination of the money was discussed drop by drop and controversially. The unconfirmed version circulated that the €100 billion would practically be distributed among medium-sized entities—Caja Córdoba and Caixa Peine were mentioned—rather than the large banks dominating the headlines. The described mechanism had compelling logic: the entities would have resources to pay German banks they were indebted to; this injection would count as public debt; and the interest on this new debt, as public deficit.

The recurring conclusion was uncomfortable: the money entered and left for Europe at the same estimulante ilegal, the foreigners weren't putting in a euro, and Spain was left, in effect, with a budgetary margin close to zero. Some analyses insisted that the correct word was rescue and not 'soft credit line,' because the fine print made no distinctions.

Why Did 6,300 Points Become the Key Support?

Holding 6,300 was the condition to keep thinking about a rebound. Above it were the references of 6,650 and 7,114 points as the first upward step in the most optimistic scenario; below, bearish targets stretched to 5,890 and, in the most extreme case, to 5,000 points. One of the most cited—and riskiest—predictions placed the bottom exactly on June 12, 2012, in the range of 5,720-5,693 points.

There was no consensus at any moment. While some argued that the reversal pattern remained intact and it was just a pullback before a rise, others countered that the major bearish structure was untouched and that annulling a downside target did not equate to setting an upside one. The nuance was insisted upon: breaking a bearish pattern leaves the market sideways, not rising.

From Dividends to Pennies: Banks in the Spotlight

Specific references per stock filled the pages. For BBVA, the line was set at €4.90 to go short; one particular session was described as one rarely seen in years, with the first candles in the hands of large buyers and the rest sold off heavily, leaving much money lost along the way. For Santander, the talk was of looking for entries between €4.56 and €4.44; for Telefónica, 9.80 as an upside target and 8.78 on the downside; for Telecinco, a double bottom at 3.28 with activation above 3.90 on the way to 4.50.

The session that best portrayed the day was a 2.13% rise in BBVA, 1.28% in Santander, 1.14% in Iberdrola, and 1.04% in Telefónica. Even so, the underlying warning was different: some maintained that banks would end up trading in pennies, and they wouldn't be the only ones.

The 11% Gap: The Paradox of Losing Money While the Index Rises

One of the most discussed episodes was the opening bullish gap. The previous week had seen positions loaded, and when the index was already 11% above its lows, the jump occurred. The result was a perfect trap: those who had been waiting saw the train leave and didn't dare to get on; those who had been burned were still at a loss even though the index had risen 10% from the bottom.

The majority interpretation was that the move aimed to shake out small investors and start the journey with as few people inside as possible. The precedent cited to temper enthusiasm was from 2008: a session where major banks rose 10% only to return to their starting point two days later.

How Was Intraday Volume Read, and Who Moved the Market?

Analysis of the IBEX futures volume became a daily thermometer. One day, high activity with a negative balance was detected, with more sales at the low thresholds (small orders) than at the high ones, and the day's high was made at 13:45 at 6,405 points, closing at 6,455, down 0.86%. On another day, the largest transaction was a purchase of 164 contracts at 10:04, right at 6,315, after which selling began with low volume.

The practical conclusion drawn was that the movement was being dragged along by many small, disguised orders, while large traders were gradually offloading stock. When the macro data appeared in the mid-afternoon, technical channels broke suddenly, and levels ceased to be relevant. The repeated warning: days with US employment data require taking levels with a pinch of salt.

What Slipped In Between the Charts

Amidst the candle counting, other stories emerged that fueled pessimism. Information from Reuters about New York City pension funds was brought up, joining a derivative lawsuit against Wal-Mart for alleged bribery in Mexico and its supposed cover-up; the matter was framed within the demand for accountability from boards for their fiduciary duty to shareholders.

Also closely watched were the bankruptcies in the US energy sector: Patriot Coal, described as a very dangerous stock, and James River Coal trading near two dollars with no bankruptcy news. In Spain, speculation arose about a possible corporate operation on Solaria, which, if it failed, would leave the company on the brink. And in the background, the recommendation from a classic manual was cited by its title: Cash, Strategy Against the Crash.

The Rebound Came, But No One Signed a Peace Treaty

The index eventually recovered ground to 6,732 points, with the SP500 at 1,344 pushing from Wall Street and several markets opening at a premium to forex, a signal some read as danger and others as confirmation. 6,800 seemed within reach, almost without a pause.

And that's where everything got stuck. There was no consensus on whether that was the real bottom or a two-week mirage. The 6,300 held the assault, but between the €100 billion rescue, interest rates turned into deficit, and volatility that was starting to provide usable ranges, the unanswered question remained the same as at the beginning of the month: if this was the bottom, why did it still feel like a trap?